Commercial deals accompany French-UK accord

17 February 2012

Nuclear deals potentially worth more than £500 million ($790 million) were signed on the sidelines of the Franco-British Summit in Paris today as a strengthened cooperation agreement on civil nuclear energy was signed between the two countries. Many of these deals relate to EDF Energy's plans to construct two Areva EPR reactors at Hinkley Point in Somerset.

Areva and Rolls-Royce have now agreed on how the British firm will support the construction of EPR reactors, both in the UK and internationally. Rolls-Royce is to manufacture "complex components" (including reactor vessel internals, heat exchangers, accumulators, coolers, tanks and vessels) and provide engineering and technical services for the first of two EPR units to be built at Hinkley Point in Somerset. Rolls-Royce said, "Once contracted, the work could be worth a total of £400 million ($632 million) in revenue to Rolls-Royce for the four EPRs currently planned by EDF Energy in the UK."

This followed the signing of an initial cooperation agreement between Areva and Rolls-Royce in March 2011. Areva CEO Luke Oursel commented, "Since our original commitment in March, we have widened and deepened the scope of our cooperation. Today's agreement indicates how far we have travelled."

Rolls-Royce and Amec have also agreed to cooperate with France's Commissariat á l'énergie atomique (CEA) on development of Astrid (Advanced Sodium Technological Reactor for Industrial Demonstration), a fourth generation fast neutron reactor. The Astrid program foresees a prototype operational by 2020 and ultimately aims for France to have in place all the necessary elements for industrial deployment of fast reactors starting from 2040.

Areva and EDF Energy have today signed a memorandum of understanding related to the delivery of the nuclear steam supply system and all central instrumentation and control systems for both reactors planned for Hinkley Point C and confirming their plan to complete the negotiation for the contract by the end of the year. EDF will make final investment decision on Hinkley Point C by that time.

A contract worth over £100 million ($158 million) for site preparation work at Hinkley Point has been signed between EDF Energy and a joint venture between Kier and BAM. The work includes excavation, earthworks, terracing, installation of construction site infrastructure and formation of roads and networks to allow main construction to begin. EDF noted that this is the first major construction contract for preliminary works at the site and that work is expected to begin in the next few months.

An agreement was also signed today between Assystem and Atkins to expand their joint nuclear engineering alliance - Nuclear Atkins Assystem Alliance - to support EDF in the development of the UK EPR program. The 50-50 joint venture was created in December 2010 and aims to take a substantial part of the estimated $16-20 billion market for consultancy, design and engineering among countries introducing nuclear power for the first time. Under the new agreement, the alliance will support EDF in those parts of its UK program where it seeks a Franco-British team.

Henri Proglio, president of the EDF Group, said: "The Franco-British Agreement reached today will be a catalyst for further collaboration which will result in significant economic activity for both nations and provide an important boost to the nuclear industry in the UK and france. It shows our collective and unwavering commitment to safety, skills, research and development and international cooperation."

British prime minister David Cameron said, "The deals signed today will create more than 1500 jobs in the UK but they are just the beginning."